Statement of Work for New Industrial Building Construction 2010.doc

Development Services and Data to use in estimating an Output Price Index for

New manufacturing/industrial Building Construction I.

Background:

The Producer Price Index (PPI) Program has been funded to (1) re-specify the new manufacturing/industrial building models used for index calculation of PPIR 236211 and (2) update the sample of contractors to keep the survey current. This work is necessary to continue producing an accurate output-based price index for New Industrial Building Construction (236211). In order to re-specify the models and update the sample, specialized data and services must be procured from an outside vendor.

II.

Description:

The PPI program requires services and data to aid in updating the industrial building models and sample used to calculate PPIR 236211. In addition, a methodology to update the costs included in the model must be developed. The methodology should adjust the costs for each component of the model to reflect actual price movement observed within the region. These services and data are not available from public sector sources. It is the intention of the Bureau of Labor Statistics to procure these services and data from an appropriate private sector vendor.

III.

Scope:

The services and data covered by this statement of work include everything necessary to re-specify manufacturing and industrial building models for the four census regions (Northeast, South, Midwest, and West) and maintain continuous calculation of PPIR 236211. This specifically includes:

1. Delivery of a project list of all new manufacturing/industrial buildings bid on or built in the United States between June 2007 and June 2010. This list should exclude additions, alterations, and renovations to existing structures.

2. Development of four manufacturing/industrial building models. One for each major Census region.

3. Development of a methodology to update the input costs of the four regional industrial building models on a quarterly basis. The updates should reflect actual price movements of input costs within each region.

4. Delivery of cost updates for each of the four regional models due on a quarterly basis.

5. Provide assistance to BLS on an ‘as needed’ basis to understand the make-up of the models, to evaluate model cost changes, and to evaluate any future updates to the models due to significant changes in ‘typical’ construction materials and/or practices.

All of these activities are necessary for continuous publication of PPIR 236211.

IV.

Goal:

1. To maintain the currency of the sample, the regional manufacturing and industrial building models, and the index (PPIR 236211).

2. To implement a cost update methodology for the regional models which reflects actual price movement observed for the input costs within each region.

V.

Objectives:

1. Obtain from the vendor a reasonably comprehensive list of all new manufacturing/industrial building projects built or bid on in the United States during the period of June 2007 to June 2010.

2. Identify the most appropriate material make-up of the high level project features (roof type, building frame material, exterior wall material, etc) which the model should possess for each region.

3. Develop four fully detailed regional manufacturing/industrial building models incorporating the high level specifications selected in number 2 above.

4. Use the manufacturing and industrial building project list to create a listing of the general, roofing, electrical, plumbing, HVAC, and concrete contractors that have worked or bid on the projects in number 1 above.

5. Initiate survey respondents to provide data based on the newly specified regional manufacturing and industrial building models.

6. Develop and implement a methodology to update the input costs for the four regional models on a quarterly basis.

VI.

Approach:

1. The BLS will use information supplied by the vendor on new manufacturing/industrial building projects built or bid on in the United States from June 2007 to June 2010 to determine the material composition of the high level specifications (roof type, building frame material, exterior wall material, etc) for four regional manufacturing/industrial building models.

2. The vendor will detail four regional new manufacturing/industrial building models using specific projects selected by the BLS from the list of building projects supplied by the vendor and the vendor’s expert knowledge of current new manufacturing/industrial building construction practices such as achieving LEED (Leadership in Energy and Environmental Design) certification. These models will include current material, installation, and cost information which will be used to gather data from BLS respondents.

3. After the initial model development, the vendor will independently survey all relevant sources of cost data for the model on a regular basis in order to update the model cost information on a quarterly basis.

4. The BLS will combine overhead and profit mark-up data obtained from initiated survey respondents along with material and installation cost data provided by the vendor to estimate output price trends for new manufacturing/industrial building construction activity.

5. The BLS may request assembly/component specification updates to the regional models if there is a substantive shift in ‘typical’ construction methods and/or materials while the models are in use. Cost information will be required from the vendor if assembly/component specification data change in order to perform quality adjustment.

VII.

Deliverables:

1. A reasonably comprehensive list of ALL new manufacturing/industrial building projects constructed or bid on in the United States during the period of June 2007 to June 2010. Each project must include the following: a unique project ID, project name, building area expressed in square feet, total project cost, cost per square foot, site location (including address, city, state, and zip code), number of stories, building frame material, roof cover material, exterior wall material, and LEED rating. Each project record should indicate with a “Yes” or “No” whether building plans are readily available for each project that can be used by the vendor to develop the building model.

· Performance Measure: The project list is due three weeks after the contract award date. The project list must be delivered in an Excel format. The number of projects deemed ‘unacceptable’ by BLS shall not exceed 10 percent of the complete list of new manufacturing/industrial building projects submitted to BLS. Unacceptable projects include:

a. Projects that do not meet the definition of ‘new construction.’

b. Projects which do not meet the definition of a ‘manufacturing or industrial building.’

c. Projects that are duplicates of other projects in the list.

The final number of acceptable projects must be sufficiently large such that one could reasonably conclude that most new manufacturing/industrial building projects built in the United States between June 2007 and June 2010 are included.

2. A list of contractors (general, concrete, plumbing, HVAC, electrical, and roofing) that have bid or worked on a new manufacturing/industrial building construction project within the past 36 months. The information for each contractor must include the company name, address, city, state, zip code, phone number, and fax number. The same information for any additional contractors (structural steel, masonry, framing, etc) other than those previously specified that have bid or worked on a new manufacturing/industrial building construction project in the past 36 months is highly desirable.

· Performance Measure: The list of contractors is due twelve weeks after the contract award date. The number of contractors for general, concrete, electrical, and roofing must be at least seventy percent of the number of the projects listed on the final project list accepted by BLS for deliverable 1. The number of contractors for plumbing and HVAC must be at least thirty-five percent of the number of projects listed on the final project list accepted by BLS for deliverable 1.

3. A complete breakdown of four regional new manufacturing/industrial building models based on specific projects selected by BLS for each region. The breakdown must include all assemblies and components. (See attachment 1 at the end of this document for an example.) All building systems (plumbing, heating, and air conditioning, electrical, roofing, siding, and substructure) must be included in the model submission. The models must include all of the columnar information (model level, description, quantity, unit cost w/o OH&P, etc) shown in the attachment example for each line of the models. All assembly level cost information must accurately reflect the aggregation of the appropriate component level cost information. Similarly, the total cost (both with and without subcontractor OH&P) for each line in the model must accurately aggregate the material and installation costs for that line. The cost information for the assemblies and components must reflect costs occurring within the model’s region. No partial quantities may be used for items which are not divisible into partial quantities. For example, ‘1.5 toilets’ is not acceptable.

· Performance Measure: Each model is due six weeks after BLS selects the specific project to be used as the model. The model is to be delivered in an Excel format and, with few exceptions, must meet the criteria specified above.

4. Develop and document the methodology to be used to update the costs in the model. The methodology should:

a. reflect actual costs observed in the marketplace since the previous quarterly cost update.

b. be based on a sufficient sample of companies providing cost information.

c. use only cost information for the region that the model encompasses.

d. attempt to incorporate all of the various costs (material, labor, equipment, fuel, general conditions, etc) which are an included in the total construction cost of a manufacturing/industrial building.

The documentation of the cost update methodology should:

a. fully detail all survey methods to be employed to collect information used to update the model costs.

b. state the average number of companies to be contacted as part of the survey process.

c. explicitly state what types of costs (material, labor, equipment, fuel, general conditions) are and are not incorporated by the update methodology.

d. fully explain how the costs in the model are moved via the update methodology.

e. indicate any costs that will not be updated as a part of the quarterly update due to not collecting information for that type of cost in every period or for some other reason.

· Performance Measure: Documentation on the methodology is due six weeks after all of the final manufacturing and industrial building models have been created.

5. Quarterly cost updates for the four manufacturing and industrial building models. The first cost update is due in whichever of the four months (March, June, September, or December) first follows acceptance and approval of the regional models and the cost update methodology.

· Performance Measure: Cost updates for each of the manufacturing and industrial building models are delivered by the 10th of March, June, September, and December unless an extension is granted by BLS. The quarterly cost updates will reflect actual changes in costs for material, installation, and fuel observable in the market place since the previous cost update for each particular region.

6. Explanation of quarterly cost changes for the regional models and any quality adjustment information required by BLS due to changes in the regional models. Along with the delivery of the quarterly cost updates the vendor provides reasoning for any significant model cost changes. BLS may also request additional information for cost changes that it deems noteworthy or for cost information to make adjustments when the models or cost update process change.

· Performance Measure: The vendor provides written explanations of significant cost changes along with the model updates. Any additional information requested by BLS concerning price changes or changes in the model or cost update process is provided in writing within five business days.

VIII.

Definitions

Term: Assembly

Definition: A discrete job completed by a single type of trade contractor. Every job necessary to construct a building should be encompassed by a unique assembly

Example: Concrete slab on grade, 5" thick, heavy industrial, reinforced.

Term: Component

Definition: A unique subset of an assembly. A specific material or labor used in the completion of an assembly. A group of components are all the materials and labor necessary to complete the assembly.

Example: Ready mix, regular weight, 3500 psi. 1500 c.y. concrete for $11,500.

Term: LEED Rating

Definition: The Leadership in Energy and Environmental Design (LEED) Green Building Rating Systemtm is a third-party certification program which encourages and accelerates global adoption of sustainable green building and development practices through the creation and implementation of universally understood and accepted tools and performance criteria. For more information go to www.usgbc.org.

Term: Manufacturing or Industrial Building

Definition: A single structure used primarily to house production or assembly activities. The building may also include office and/or warehouse space, but it is predominantly used for industrial, commercial assembly, and/or manufacturing space. Structure types that shall not be considered manufacturing or industrial buildings include: refineries, petrochemical plants, water treatment plants, sewage treatment plants, pumping stations for water and sewer systems, power generation plants, industrial warehouses, ovens, kilns, cement plants, industrial incinerators, nuclear containment structures, and other non-building structures.

Term: Midwest Region

Definition: A region of the United States consisting of the following states- Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

Term: New Construction

Definition: An entirely new structure that is not attached to, or a modification of, any previously existing structure. New construction includes erecting a building on a location where the previous building was demolished. Construction of the building must be done primarily on-site.

Term: Northeast Region

Definition: A region of the United States consisting of the following states- Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.

Term: South Region

Definition: A region of the United States consisting of the following states- Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

Term: West Region

Definition: A region of the United States consisting of the following states- Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.

IX.

Period of Performance:

Twenty-four months, beginning at the contract award date.

X.

Inspection and Acceptance:

Designated staff of the Producer Price Index Program will make final inspection and acceptance of the specified deliverables.

XI.

Location of Performance

All work will be performed at the Contractor’s site.

XII.

Contracting Officer’s Technical Representative (COTR):

The Contracting Officer’s Technical Representative (COTR) shall be named by the Contracting Officer in the COTR Designation Letter. Authorized COTR duties will include:

· Directing work.

· Inspecting and accepting services.

· Approving Progress Reports.

· Approving invoices.

The COTR is responsible for the technical aspects of the project and technical liaison with the Contractor. The COTR is also responsible for the final inspection and acceptance of all reports and such other responsibilities as may be specified in the contract.

The COTR is not authorized to make any commitments or otherwise obligate the United States Government or authorize any changes which affect the contract price, terms or conditions of the contract. Any Contractor request for changes shall be referred to the Contracting Officer directly or through the COTR. No such changes shall be made without the expressed prior authorization of the Contracting Officer. The COTR may designate assistant COTR(S) to act for them by naming such assistant(s) in writing and transmitting a copy of such designation through the Contracting Officer to the Contractor.

The COTR may be changed at any time by the Government without prior notice to the Contractor but notification of change, including the name and address of the successor COTR, will be promptly provided to the Contractor by the Contracting Officer in writing.

The prospective Contractor shall designate the person whom the Government may contact during the period of performance of the contract for prompt attention on matters pertaining to the administration of the contract.

The individual(s) named below are the key Government personnel (COTR):

DHROM-Contracting Officer Technical Representative (COTR):

Frank Congelio Bureau of Labor Statistics

Postal Square Building, Room 3840 2 Massachusetts Ave, NE

Washington, DC 20212

TEL: 202-691-7712

FAX: 202-691-7753

Email: Congelio.Frank@bls.gov

XIII.

Submission of Invoices:

· Invoices are required for each deliverable stated in Section VII. Each invoice must contain the following information:

1. Name of Contractor.

2. Contract Number

3. Invoice date

4. Contractor contact name and phone number

· Contractor invoices will be submitted to the address specified for the BLS office. Invoices shall consist of an original and at least one copy.

Table 1: Illustrative Example of Detail Breakdown required for Building Model Deliverables

Level 1 (System/Major Group Element) Substructure

Level 2 (Sub-system/Group Element/Assembly) Slab on Grade

Level 3

(Assembly/Component)

Level 4

(Unit/Element)

Material/Installation